Business

Flour Mills acquires 76.8% stake in Honeywell Flour Mill

Flour Mills of Nigeria (FMN) has unveiled plans to spend about N34 billion over the next 10 years to develop Sunti Community in Niger State, hosting of one of its sugar plants – Sunti Golden Sugar Estates (SGSE).

Nigeria’s major flour maker, Flour Mills of Nigeria Plc, said it has brokered a deal to buy out the majority equity interest in rival Honeywell Flour Mills, majority owned by billionaire and immediate past chair of FBN Holdings Oba Otudeko.

The agreement enables Flour Mills to purchase 71.69 per cent stake in Honeywell, while a separate pact with FBN Holdings Group allows the miller to acquire the financial services group’s stake of 5.06 per cent in Honeywell, bringing its consolidated holding in Honeywell to 76.75 per cent.

Quoting a regulatory filing note at the Nigerian Exchange Limited on Monday, newsmen report that the deal could mean Flour Mills will be taking over about 6.09 billion units of Honeywell’s 7.93 billion ordinary shares, priced at an opening price of N3.39 per unit on Monday.

It said the disposal of the 71.69 percent stake by Honeywell will be conducted on the basis of an enterprise value N80 billion.

The deal marks the third major merger and acquisition transaction involving a quoted company this month, following Rainoil’s buyout of more than 60 per cent stake in Eternal Oil and Ardova’s takeover of Enyo Oil.

Honeywell has returned 182.5 per cent in the past one year, according to Financial Times data.

The transaction will be consummated following receipt of regulatory approvals, Flour Mills said in the statement. Both entities will execute a business combination and merge them into one.

Flour Mills reported revenue in the sum of N771.6 billion for the financial year ended 31st December 2020, bigger than what was recorded by Nigeria’s biggest bank Access Bank for the same period, standing at N764.7 billion.

“We believe that this will create an opportunity to combine the unique talents of two robust businesses,” the report quoted Flour Mills Group Managing Director Omoboyede Olusanya, to have said.

“As a result, we will have a better-rounded and more comprehensive skill set available to us as a combined diversified food business, thus enabling us to better serve our consumers, customers and other stakeholders, whilst providing employees with access to broader opportunities,” it added.

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